China-USA Trade War Case Analysis

Introduction

The trade between USA and Asia has changed gradually; the changes involve positive and negative impacts towards the United States and the other partners. After the scrutiny probe done by the United States about the status of domestic companies and versus imports and exports, several changes have been made and seems more need to be done. It is clear that about 70% of individuals in China, Canada, Australia, and Mexico are not happy with the move made by the United State President. Most importantly, China is the most affected country on the proposed tariffed subjected to them. While China is the second largest economy in the world, it remains a critical field to handle matters concerning the tariffs. The tariffs would affect both China and the United States in many ways that include political matters, economical moves, policy, regulations, intervention with the World Trade Origination, and the national security at entirety. The trade tariffs hit China with $ 200 billion as a proposal just before announcing 10% and 25% on 60 billion dollars double the earlier tariff on China("2018 China-United States Trade War" 2018). Many economist experts have neglected these move and condemned it basing their arguments on several trade types of research and historical aspects. A flashback to the historical event, a move to raise tariff was defined as an economic conflict between two trading countries (Roberts 2018). There are more than economic conflict, several other negative impacts may spark soon, or even at long last, they may range from political integration to budgetary terms. Moreover, in 1930 the Congress passed the same act called Smoot-Hawley Act, that act seems like the current full brown situation, the situation worsened in both USA and the countries trading with the US at that particular time (Roberts 2018).

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Many people in the United States lost their jobs and economic situation worsened than before, the company increased their cost of production, which lead to an equivalent rise in commodity prices. From that historical event and other events that have led to a rise in tariff in trading partners is always viewed in the different perspective of politics and economic crisis. However, a change is always good, and people do not accept change with ease. The move to impose the imports tariffs from China and other parts of Asia for the fair trade between the trading countries and will consequently help the citizens of United States. Moreover, that kind of move will make the terms of business clear and comprehensive between the trading partners. According to history, in such situations, many countries have retaliated to such steps while others have no option. Eyes and hope are left to the United States president concerning this move, going the manufacturing industries using the Chinese products at a pressed corner and praying for help and the best way forward. Many countries use the United States manufactured goods without knowledge that 70% of such gadgets come from Chinese in the form of aluminum, silicon, and steel (Briefing 2018). As far as a change is made in any country, there is a great need to establish the effect the move would bring to the country and the trading country. Also, bodies like the World Trade Organisation are always

Further the released list by United Stated list items like medical gadgets and aircraft parts. Also, electronic appliances, flat screen TFT and TVs, batteries. The tariff imposed is mainly directed to make the Chinese product expensive to the extent where the United States citizen will turn to domestic products.

On the other hand, the Chinese people can do similar acts to United States companies in China. Several sources indicate that Trump invites the war and other sources show that China president/ the secretary general to communist has the ways to handle the matters and sure that Trump is defeat. The fight by Donald Trump has spread over to other countries in a relationship with China; these countries include Iran, Korea, and others. It is not the first time the United States has declared war trade to the partnering country. The trade war has been there in the past, in many instances, the trade war ended wrong living more than 146,000 citizens in the united state jobless (Roberts 2018). However, some trade threats made by George W Bush were a success and are the fuelling reason for the Trump decision. Donald Trump declared this war during the presidential election; China might have realized this before and prepared for it.

China - USA Trade Historical Brief

Both China and the United States of America had had a great history in matters pertaining trade. The two countries have the most significant economies in the east and west respectively (Moghaddam and Duan 2017). A trade dispute between these two countries has always influenced a significant change in other countries in the world. There is a series of trade evident for the nations, which will remain remarkable; some events happened for goodwill while others happened to cripple the other's economy. The cloth, silk, and Chinese tea exportation kicked off back in 1844. The USA gained the same rights as China and the United Kingdom; later the treaty was revised since it seemed unfair to the Chinese that was 1943. The diplomatic relationship between the two countries and bilateral trade started in 1979 when Beijing and Washington decide to trade together (Moghaddam and Duan 2017). Ronald Reagan, by then the president of US paid a business trip the to China to enhance trade and eliminate dual taxation; however, these followed after china visited IMF and World Bank for tax issues in the United States. Back in 2005, China launched Yuan as their currency and started a domestic investor fund institution. History can repeat itself, evidently, some historical events that happened, but China managed to handle them.

China's Current Reaction Towards Tariffs

Consequently, China has retaliated from Trump tariff in a bid to show Trump that China will not go down without a fight. Beijing also announced to increase taxes on the US imports to China, the kind of war noted between the two countries would affect the trade ion other world economy and IMF at entirety. The move by Trump is taken as a grudge to China and its economy; trump did not mention another country but China individually. China decided to target trump personally and not at state; Xi Jinping aims natural gas imported from states, which are Trump's stronghold. China would soon place extra 5% duties to United States goods like textiles, computers, and aircraft. Moreover and additional 10% extra duties on wine, chemicals, and wheat, farmers in the United States will be affected. However, there is a solution to make things up for both economies, but the United States will still be ahead.

New Approach Proposal

Trade Liberalization

The president should consider the United States citizens and try to review the decisions from international communities. Also, the US Companies that are operating in China are suffering; this is where the president may choose to reduce quotas. However, since Trump would not get back and violate his terms easily, there is a need to sandwich diplomatic sanctions cleverly. These can be done by reducing some Chinese company sanctions like the ones imposed on ZTE Company; the president can as well welcome ZTE trade to Washington back (Staff 2018). With such type of approaches, China may decide to take new tariffs or reduce their taxes through bilateral talks with the United States of America. China-USA war trade is an economic fight between the largest economies in the world, an argument directed to China is not a fight to let go quickly. China has viewed the move by Donald Trump as a way to cripple China economy and take the trade partners working with Chinese. Xi Jinxing has taken United States message as crude defense mechanisms to greed and bad economic relationship. Beijing has already proved that China would not retaliate or even fall for Donald Trump's reasoning and actions. Moreover, the United States president's advisor Peter Navarro said that the tariff would drive the cost of imports to the higher levels (Staff 2018). Also, the set tariffs threats the international monetary fund; the move to impose such tariff on chine would mean that each economy in the world would be affected. While basing facts on these two economies, there are consequently two outcomes from this type of type of solution.

Policy Management

Several policies can be used to cool things down and realize the benefit to the US. The primary procedures include Legislative approach, and authorizing systems, each of them has underlying factors. Considering the first policy, United State is a country with hordes of policy actors, plans in the country are formulated in multi-levels. Fragment a system can distribute policies to different states, government branches, and corresponding federal levels. The Congress in the United States can formulate strategy; it is possible because the body acts as the legislative body. Congress can consequently oversee the management of the executive where the president comes in. In that, way policy can be fragmented and formulated otherwise. The judiciary will also change some system if they affect the country or beneficial to the state through precedents. Also, legislative provisions would reinforce the court to make sure a policy is followed. On the other hand, authorization may be used; for instance, the United States president has the power to use executive authority as an authorizing tool. Since a report from the CNN news revealed that China would now target the United States companies operating in China, the president can advise people to stop using China product and support domestic products. However, the US companies in China could still suffer. Moreover, the similar China Companies operating in the United States of America should continue with their trade without being subjection to the domestic violation.

Analysis and Evaluation

This section is essential for analysis and evaluation actions and impacts caused by the new proposal approaches to China-US trade war. After a successful analysis and evaluation, the justified recommendation is made to ascertain the best way to follow and the factors that would not mitigation. Some years back WTO would have intervened and determined the Most Favored Nation (MFN), to come up with the solution for the whole situation. However, MFN is now old-fashioned; WTO can only encourage policy agreements between the different states. In the evaluation and analysis comprises of pros and cons of the whole situation.

Pros

Economic factors

Trade liberalization would bring free trade area between China and USA, in this kind of move the customer's cost will consequently reduce, people in the United States would get back to their initial status, and the United States will gain more exports than exports.

Competition between the imports and domestic produced good will be heightened; this will influence high-quality goods produced in the United States when the domestic companies try to cope with the stiff competition from China.

The USA would realize more income from the exportation sector when economic sanctions are imposed; the USA would reduce basics substance and tax substance like tobacco and wine expensively. Other heavily taxed products include luxury commodities like the car and prestigious phones.

The United States dollar would be more powerful; because the reduction of tariff and quota does not mean withdrawal, and when there is a war between the broader econo...